A stunning backlog of ships and stacks of shipping containers at major ports aren't something investors can ignore. But they should think twice before...
A stunning backlog of ships and stacks of shipping containers at major ports aren’t something investors can ignore, but they should think twice before assuming widespread bottlenecks represent a classic supply shock.
That’s an important distinction. A negative supply shock — an unexpected fall in the availability of a product or commodity — can be unnerving for investors who are more used to dealing with the occasional threat of negative demand shocks — an unexpected hit to demand for goods and services. Problems aren’t confined to the ship backlog at ports. A shortage of truck drivers and available chassis means that containers are stacking up, making it difficult to get goods to their destination once they’re finally on dry land.
It should be no surprise that supply bottlenecks are already emerging as a theme on corporate earnings calls as third-quarter results begin to trickle in. “I think that’s going to have a read-through to earnings across the board, but really just pick your sector,” Donnelly said. The firm’s “time of turnaround” bespoke metric quantifies whether the time it takes to discharge a container is increasing or decreasing, said analyst Michael Tran, in a phone interview. At the ports of Los Angeles and Long Beach, the two largest in the Western Hemisphere, the time of turnaround is now 6.4 days, nearly double the pre-pandemic average of 3.6 days.
A slowdown in demand is almost assured, said Nuveen’s Nick. The U.S. economy has already started to lose momentum after hitting peak growth as a result of stimulus efforts and pent-up demand earlier this year.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
An SEC Rule Was Meant to Protect Individual Investors. Chaos Ensued.Thousands of stocks and bonds in the over-the-counter market are now out of reach for small investors. Professionals are still trading.
Read more »
California port crisis, tangled supply chains are fueling a shipping container boom. Will it bust?Supply-chain bottlenecks are clogging ports in California, but also skyrocketing costs to ship goods and rent sea containers ahead of holiday shopping season.
Read more »
Inflation, Supply-Chain Disruptions, Dysfunction In Washington And A New Workers’ Mindset Contributed To A Disappointing September Jobs ReportAccording to the Department of Labor, United States employment only rose by 194,000 in September, as opposed to an anticipated increase of 500,000 new jobs.
Read more »
Covid supply chain's latest victims: Halloween shoppersWith just a few weeks until Halloween, shoppers across the country are encountering bare store shelves and 'sold out' signs online as they hunt for decorations and costumes.
Read more »